To avoid the possibility of a client filing a successful legal case, Shine Lawyers says financial advisers must ensure they have "thorough" risk management practices in place.
Speaking to ifa, Shine Lawyers NSW commercial litigation and insolvency practice leader, Luke Whiffen, said financial advisers need to be aware that clients are "more sophisticated" than they once were, and are far more aware of their rights to seek "redress" for any losses sustained through their being provided professional advice.
As a result, Mr Whiffen said, advisers need to put in place proper risk management practices to ensure that they are well guarded against any potential legal claims.
"They need to take file notes, need to make sure that the risk assessment of clients' financial profile is done, and done thoroughly," he said.
"At the end of the day, if they are not [done properly] then the client is probably going to have grounds for investigating a claim or perhaps making a claim," he said.
In fact, Mr Whiffen highlighted that many former advice clients have come forward looking to determine whether they have a case against a financial institution or adviser.
"We are definitely seeing an uptick in people who are really trying to take advantage of [our] model which allows them to take on the bigger end of town and to claw back losses of things such as retirement savings," he said.
However, to raise awareness among clients who may not realise they have a right to make a claim for losses sustained due to poor advice, Shine Lawyers has taken to social media to prompt clients to think about their experiences and whether they suffered losses because of poor advice.
Mr Whiffen said this will encourage former clients to look back at the conduct of their adviser and think about whether "any of their losses were a result of their negligence or misconduct".
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